State Drug-Pricing Laws Hampered by Resistance, Lack of Teeth
February 3, 2020 Bloomberg Law
State laws aimed at forcing the pharmaceutical industry to account for rising prescription-drug costs have done little to dampen price increases, in part because the companies skirt robust disclosure with relative impunity.
At least 11 states have laws requiring manufacturers to provide data on drugs’ costs, warnings before some prices increase, and justifications for changes. But many companies are complying only partly or not at all, saying the information is confidential under federal law, and some of the laws have few or no enforcement powers, Bloomberg Law found.
All of the manufacturer-focused state laws analyzed by Bloomberg Law require disclosure rather than regulate drugs’ base prices. Maryland tried the latter approach but a federal court ruled its anti-price-gouging law illegally regulated interstate commerce.
States mostly require manufacturers to report the wholesale cost of their products and why they raised prices above a designated threshold. Several laws include carve-outs that don’t require companies to report proprietary information or go beyond what’s in the public domain.
Many of the states also have transparency requirements for insurers, pharmacy benefit managers, and others that influence drug costs. Some have tried other methods of reducing costs, such as Colorado’s cap on co-pays for insulin.